"Today’s PMI data would come as a relief for policymakers, as it
suggests that the economy is not slowing as quickly as the PMIs
indicated earlier," say economists at Barclays. "Last week,
Premier Li said that the government has policies ready to counter
any volatility this year, as well as the capability to maintain
growth in a reasonable range. To us, this suggests that the
government is going to take more action to stabilise growth, a
view we expressed following the release of much
weaker-than-expected China data a couple of weeks ago."

Also out Tuesday were monthly Korean trade data. Exports advanced
5.2% from a year earlier — above expectations for a 4.2% rise —
while imports rose 3.6%, slightly above expectations for a 3.5%
gain.

"Korea's stronger manufacturing conditions in March show that its
economy remains on track for a gradual recovery," said Ronald
Man, an economist at HSBC, in the PMI release. "Economic growth
is expected to be maintained in 1Q 2014, albeit a slower pace
when compared with the previous quarter. One promising sign for
the trade-dependent economy is stronger export orders from China,
which is Korea's largest export market."

Korea is known as the "economic canary in the coal mine" given
its close ties with the Chinese economy.